Class Action Suit Filed Against Macromedia, Inc. and Its Officers and Directors Alleging Misrepresentations, False Financial Statements and Insider Trading

Business Wire, Nov 21, 1997

SAN DIEGO--(BUSINESS WIRE)--November 21, 1997--A class action has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of Macromedia, Inc. ("Macromedia") common stock during the period April 18, 1996 to January 9, 1997 the ("Class Period").

The complaint charges Macromedia and certain of its officers and directors with violations of the federal securities laws. Macromedia is a computer software company. Prior to the commencement of the Class Period, Macromedia reported high profit margins and enormous growth in revenue and earnings. Based upon the reports, the Company's common stock traded at a very high multiple of its reported earnings and was particularly sensitive to any decrease in its sales, profit margins or rate of growth.

The complaint alleges that during the Class Period, to prevent Macromedia's stock price from collapsing, defendants engaged in a fraudulent scheme and course of business that operated as a fraud and deceit on all persons who purchased Macromedia common stock. Defendants issued false and misleading statements about the success of Macromedia's principal products, Macromedia's business prospects, Macromedia's financial results, Macromedia's domestic and international sales, and other aspects of Macromedia's business. These statements drove Macromedia's stock to a Class Period high of $46-1/2 and enabled the Company to complete an acquisition in exchange for 600,000 shares of Macromedia stock and the Individual Defendants, who were all senior officers and/or directors of Macromedia, to sell 257,000 shares of their Macromedia stock at artificially inflated prices as high as $45-1/4 per share, realizing almost $9 million plus bonuses payable only if performance criteria were met.

On January 9, 1997, it was exposed that Macromedia's sales and prices had plummeted and expenses had drastically increased. The next day the price of Macromedia common stock lost over 31% of its value, falling to as low as $9-1/16 per share.

Plaintiffs seek to recover damages on behalf of all purchasers of Macromedia common stock during the Class Period (the "Class"). Plaintiffs are represented by several law firms, including Milberg Weiss Bershad Hynes & Lerach LLP and Kaplan, Kilsheimer & Fox LLP, who have expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

If you are a member of the Class described above, you may, no later than November 28, 1997, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffs' counsel, William Lerach or Mark Solomon of Milberg Weiss at 800/449-4900 or via e-mail at wsl@mwbhl.com or Jonathan Levine of Kaplan Kilsheimer at 800/290-1952 or 212/687-1980.

CONTACT: Milberg Weiss

William Lerach/Mark Solomon, 800/449-4900

wsl@mwbhl.com

or

Kaplan Kilsheimer

Jonathan Levine, 800/290-1952 or 212/687-1980